Scribd Logo
Upload

Welcome to Scribd!

  • 155 views

    5 Litonjua Jr. v. Eternit Corp.

    Uploaded by

    Mariel Quines
    Eternit Corp owned land that it sought to sell. Several individuals, including the general manager and regional director, negotiated a sale to Litonjua, with Litonjua depositing $1M. However, Eternit's board of directors had not authorized the sale. The court found the sale invalid because the individuals negotiating the sale lacked proper authorization from the board. A corporation's board of directors must expressly authorize land sales, and individuals cannot bind a corporation without board approval. As the board did not ratify the sale, it was void.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    5 Litonjua Jr. v. Eternit Corp.

    Uploaded by

    Mariel Quines
    155 views2 pages
    Eternit Corp owned land that it sought to sell. Several individuals, including the general manager and regional director, negotiated a sale to Litonjua, with Litonjua depositing $1M. However, Eternit's board of directors had not authorized the sale. The court found the sale invalid because the individuals negotiating the sale lacked proper authorization from the board. A corporation's board of directors must expressly authorize land sales, and individuals cannot bind a corporation without board approval. As the board did not ratify the sale, it was void.

    Original Description:

    case digest

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Eternit Corp owned land that it sought to sell. Several individuals, including the general manager and regional director, negotiated a sale to Litonjua, with Litonjua depositing $1M. However, Eternit's board of directors had not authorized the sale. The court found the sale invalid because the individuals negotiating the sale lacked proper authorization from the board. A corporation's board of directors must expressly authorize land sales, and individuals cannot bind a corporation without board approval. As the board did not ratify the sale, it was void.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    155 views2 pages

    5 Litonjua Jr. v. Eternit Corp.

    Uploaded by

    Mariel Quines
    Eternit Corp owned land that it sought to sell. Several individuals, including the general manager and regional director, negotiated a sale to Litonjua, with Litonjua depositing $1M. However, Eternit's board of directors had not authorized the sale. The court found the sale invalid because the individuals negotiating the sale lacked proper authorization from the board. A corporation's board of directors must expressly authorize land sales, and individuals cannot bind a corporation without board approval. As the board did not ratify the sale, it was void.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    5 Litonjua Jr. v. Eternit Corp.

    Facts:
    Eternit Corp manufactures roofing and pipe products - owns 47K Sq. m. land in
    Mandaluyong
    90% of shares owned by Eteroutremer S.A. Corp. laws of Belgium
    Glanville - GM and president of EC
    Delsaux - Regional Director for Asia of ESAC
    1986 - Marcos destabilization - Committee for ESAC instructed Adams, member of
    ECs BOD to dispose of the land
    Adams engaged broker Marquez to oer sale to buyers - he oered to Litonjua
    Authorized to sell for Php 27M
    Litonjua counteroered Php 20M
    Marquez informed Glanville and Delsaux of the counter oer, Delsaux did not
    respond
    Glanville telexed Delsaux who counteroered USD 1M and Php 2.5M to cover all
    existing obligations
    Marquez informed Litonjua who accepted Delsaux oer
    Litonjua deposited USD 1M
    Glanville confirmed then sent a letter on May 1987 saying that the sale would no
    longer push through - BOD denied sale
    Litonjuas demanded damages
    RTC found for EC - no board resolution, Glanville and Delsaux were not authorized by
    the BOD
    CA armed
    Issues:
    W.O.N. the sale is valid
    No - petitioners failed to prove that Adams, Glanville and Delsaux or Marquez
    were empowered to sell the properties
    Agency must be established by clear, certain and specific proof
    Sec. 23 of Corp Code of the Phils - The Board of Directors or Trustees.
    Unless otherwise provided in this Code, the corporate powers of all
    corporations formed under this Code shall be exercised, all business
    conducted and all property of such corporations controlled and held by
    the board of directors or trustees to be elected from among the holders of
    stocks, or where there is no stock, from among the members of the
    corporation, who shall hold oce for one (1) year and until their
    successors are elected and qualified
    Sec. 23 of Corp Code of the Phils - Corporate powers and capacity.
    Every corporation incorporated under this Code has the power and
    capacity: To purchase, receive, take or grant, hold, convey, sell, lease,
    pledge, mortgage and otherwise deal with such real and personal
    property, including securities and bonds of other corporations, as the

    transaction of a lawful business of the corporation may reasonably and


    necessarily require, subject to the limitations prescribed by the law and
    the Constitution
    Property of a corporation is not the property of the stockholders, it cannot
    be sold without express authority by the BOD
    Absent valid delegation/authorization by the BOD, declarations of an
    individual director are not binding on the corporation - Final say will
    always be with the BOD
    Any sale is void unless ratified expressly or impliedly by the BOD
    When a sale of a piece of land or any portion thereof is through an agent,
    the authority of the latter shall be in writing, otherwise, the sale shall be
    void
    Delsaux counteroer was only from a Belgian/Swiss decision and not
    the BOD, EC was not bound by such acceptance
    BOD resolution is a sine qua non to bind EC
    Persons dealing with an assumed agent are bound at their peril, they
    should ascertain the fact of agency - Petitioners failed to discharge the
    burden
    No damages awarded
    W.O.N. EC is in estoppel
    No - no proof of reliance upon the representations that predated the action taken
    in reliance
    Glanville and Delsaux declared they were acting for and in behalf of
    ESAC, not EC

    You might also like